BP has cut its dividend on for the first time in a decade after reporting a record
$6.7bn (£5.1bn) loss as the coronavirus pandemic hammered energy demand.
The second quarter loss, which was in line with analysts’ expectations, was largely a result of the firm’s decision to wipe $6.5bn (£5bn) off the value of oil and gas exploration assets after it revised down sharply its price forecasts, due to the COVID-19 crisis.
The dive into the red compared with profits of $2.8bn (£2.1bn) a year earlier and $791m (£604m) in the first quarter of 2020.
As a result, the firm announced it would halve its quarterly dividend.
Chief executive Bernard Looney, who took charge in February, avoided a cut in the payout to shareholders in the first quarter of the year despite worsening market conditions.
BP is not alone in feeling the squeeze of the coronavirus, which has caused energy demand to plummet as countries around the world went into lockdown in a bid to curb the spread of infection.
Other firms, including Shell and Total, the French oil major, have slashed the value of their assets in the face of the gloomy long-term outlook.
BP had been due to publish a strategy update in September, but revealed some details as it posted second-quarter results.
The energy giant said its plans to increase its low-carbon spending by 2030 to $5bn (£3.8bn) a year and boost its renewable power generation, while shrinking its oil and gas production by 40% compared with 2019.
Its future planned portfolio would include renewables and bioenergy as well as hydrogen and carbon capture and storage technology, with the bulk of the budget to be spent by 2025.
BP’s oil and gas production is expected to shrink by at least one million barrels of oil a day, some 40%, by 2030 compared to 2019 levels.
The company is also to stop exploring for oil and gas in new countries.
The firm said in a statement: “BP today introduces a new strategy that will reshape its business as it pivots from being an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers.”
The firm also said it stood by its ownership of a 19.75% stake in the Russian energy firm Rosneft.